Cubans' ration books – which are cashed in at state-run stores (above) – will no longer include 'personal cleanliness products'. Photograph: Franklin Reyes/AP

Cubans rushed to buy detergent, soap and toothpaste today before the government ends subsidies on toiletries.

Families stocked up at state-run stores using ration books which from tomorrow will no longer include "personal cleanliness products". The president, Raul Castro, warned that the monthly ration book, along with the vast state payroll, would be slashed to overhaul the communist economy and stave off a financial crisis.

With average monthly salaries of around £13, many Cubans relied on rations for the basics. Cigarettes, salt, peas and potatoes were removed from the list this year.

A bar of soap will jump from under 2p to about 14p. Toothpaste will increase from about 5p to 22p. Some Cubans have long bought toiletries for much higher prices in hard currency shops to avoid shortages and rudimentary quality, but for poorer Cubans the cut will hurt.

"It's already hard to make ends meet as it is and this is only going to make it harder," Elias Conde, a 38-year-old father of two who works in a cafeteria, told AP. "But we're used to them taking things away. Tomorrow it'll be something else."

Ration books were introduced as a temporary measure in 1962 to guarantee staple goods after the US imposed an embargo.

"Rationing has become so ingrained in our lives that many do not know whether to laugh or cry at the news of its end," wrote Yoani Sanchez, the island's best-known blogger. The subsidies allowed authorities to play down repression and highlight care for citizens, she said. "It is not only a basic, though meagre, support, but it is like the birdseed that justifies the cage."

The cash-strapped government, with the apparent blessing of Fidel Castro, has also announced it will lay off about 500,000 workers and legalise a series of private economic activities in the hope of boosting the private sector.

Separately, in Bolivia, protests flared after the president, Evo Morales, slashed fuel subsidies in an effort to save money and curb imports and smuggling. The socalist government raised the minimum wage to cushion the blow but bus and truck drivers, among others, took to the streets to demand the subsidy's reinstatement.

Venezuela's president, Hugo Chavez, has condemened his own country's lavish fuel subsidy as "immoral" but left it untouched, knowing that Venezuelans consider cheap petrol a birthright.